Lessons from Europe for India’s Anticorruption Party

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Last December, a year-old political party formed by anticorruption activists came to power in India’s capital, after a startling debut performance in Delhi’s local assembly elections. Within days, the new government, led by a former tax man named Arvind Kejriwal, announced a series of anti-graft investigations. Only 49 days into its term, however, Kejriwal and his colleagues resigned, ostensibly because their minority government could not push through an anticorruption bill. The party now has its eyes set on India’s parliamentary elections, set to occur this May.

Much has been written about India’s mercurial Aam Aadmi (“Common Man”) Party (AAP): its origins, its dedicated volunteers, its transparent campaign finance procedures, its vague policies regarding anything but corruption, and its missteps (some of which Russel Stamets discusses in a useful recent post on the FCPA Blog). Despite this, there has been little discussion regarding AAP’s place as a single-issue party in India’s deeply fractured political landscape, and little attempt to draw lessons from the successes and failures of anticorruption parties in other parts of the world.  Yet the experience of anticorruption parties in Central and Eastern Europe–as documented and analyzed by Andreas Bågenholm –offers both hope and important lessons to AAP and its supporters. Continue reading →

Does the Social Value of Corruption Indicators Depend Solely on Their Accuracy?

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We’ve had a series of posts this week (from Michael, Rick, and Addar) about the vexed question of how to measure corruption–including controversies over whether the popular perception-based measures, like Transparency International’s Corruption Perceptions Index (CPI), do so accurately enough to be useful proxies.

But in addition to that discussion — and picking up on something Rick touched on in the latter half of his post — I think it may be worth raising the questions whether: (1) something like the CPI might have desirable effects even if the CPI score is not a particularly good indicator of true corruption, and (2) whether the CPI might have bad effects even if it’s actually quite an accurate measure. To be clear, my very strong predispositions are that we should try to produce and publicize accurate measures of corruption. But it’s at least worth thinking about the possibility that the social value of an indicator may not depend entirely on the accuracy of that indicator–and about what implications might follow from that observation. Continue reading →

Corruption “Tells” — An Overlooked Factor in Determining Corruption Perceptions

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Last month, the European Commission released a comprehensive report on corruption in the EU, based on two perception surveys (one of the general population and one of businesspeople) as well as existing public data. One of the report’s most striking findings was the prevalence of perceived corruption among the general public: over 75% of Europeans surveyed thought corruption was “widespread” in their country–even in countries where very few respondents had personally experienced or witnessed corruption.

The EU Report is not the first study to find a sizeable gap between people’s perception of corruption’s prevalence and their reported personal experience with corruption.  What explains this gap?  The two most common explanations are: (1) perceptions of corruption overstate true corruption (as perceptions may be swayed by sensationalistic media reports, and perhaps skewed by factors like ethnic heterogeneity and low social engagement, or because of different understandings of what “corruption” means); (2) self-reported experiences with corruption understate true corruption, because people do not respond truthfully to questions about their personal experience even when anonymity is guaranteed.

But there is another possibility, which highlights a limitation of studies that compare only general perceptions of corruption with direct, personal experience with corruption: These surveys typically fail to account for “tells” – observable indications of potential corruption. Continue reading →

Perceptions of Reality: Transparency International’s Corruption Perceptions Index

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Matthew wrote last month about the February competition the U4 Anticorruption Resource Center and the United Kingdom’s Department for International Affairs sponsored to spur creation of new measures of corruption.  What he did not say is that one subtext for the contest was the growing frustration with the use of Transparency International’s Corruption Perceptions Index (CPI) to measure the actual level of corruption in a country.

This is not the fault of TI.   The organization is careful to say on its web site that its index does not measure the actual extent of corruption and goes to great lengths to explain how the index is constructed, stressing that it is a ranking of how corrupt countries are perceived to be using the opinions of business people and country experts.  Indeed the title selected, “Corruption Perceptions Index,” couldn’t be any clearer about what is being measured.  But journalists and academics frequently treat the index as if it measured actual corruption, rather than perceived corruption, or assume that perceptions match reality fairly closely.  And that’s where problems may arise. Continue reading →

What’s Left Out of “Left Out of the Bargain”

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A couple months back I finally had a chance to read the Stolen Assets Recovery Initiative (StAR)’s latest report, Left out of the Bargain: Settlements in Foreign Bribery Cases and Implications for Asset Recovery. It’s a very useful report (though a lot of the preliminary material is pretty dull, but fortunately fairly skimmable). The key descriptive finding is that “significant monetary sanctions have been imposed [in foreign bribery cases] with hardly any of the respective assets being returned to the countries whose officials have allegedly been bribed.” The overall tenor of the report is that this is a problem. Although the report uses careful, measured language, I interpreted it as as a call for more aggressive action to force companies that admit to foreign bribery to pay significant fines, penalties, or other damages to the countries in which the bribery took place (either to those countries’ governments, or to NGOs or special funds). The report discusses, and seems to endorse, a range of related measures designed to further this overarching goal.

I’m sympathetic with StAR’s objectives, and with the idea that more can and should be done to help the victims of corruption. But the Left out of the Bargain report suffers from a number of serious flaws—chief among them the failure to give more than cursory attention to the possible adverse incentive effects of promoting duplicative enforcement or substantial redistribution of settlement proceeds. Continue reading →

Transparency International’s Muddled Use of “Corruption,” and Why It Matters

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What corruption means informs what and how anticorruption reformers reform.

Unfortunately, Transparency International’s Corruption Perceptions Index (CPI) dodges this important issue by averaging together the responses from polls employing competing definitions of “corruption.”  This is a problem because different types of corruption have different causes, have different effects, and require different types of remedies. Transparency International should disaggregate its index of perceived “corruption” into two distinct indices: one for perceptions of illegal corruption, and one for primarily legal (but distrust-generating) conduct, which could fairly be characterized as institutional corruption.  This change would make the CPI more precise, better educating the press, public, and policymakers who rely on it. Continue reading →

Would the US Really Benefit from More Corruption? A Comment on Rauch

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Jonathan Rauch’s recent Atlantic piece has a provocative title: “The Case for Corruption.”  Extending an argument about the unintended effects of international efforts to combat corruption to the domestic sphere, Rauch asserts that “in most political systems, the right amount of corruption is greater than zero. Leaders need to be able to reward followers and punish turncoats and free agents.”  According to Rauch, the U.S. political system used to give party leaders several tools to enforce discipline: pork-barrel spending, earmarks, campaign contributions, committee assignments, and endorsements.  The problem, he says, is that these mechanisms have become too weak–that we do not have enough of the “honest graft” famously celebrated by the Tammany Hall politician George Washington Plunkitt.

Rauch makes a valuable point that pork barrel spending (including earmarks), though unseemly, might serve a useful function in facilitating deals.  But does this mean that some amount of “corruption” can be good, as his title implies?  Maybe not–it depends on your definition of corruption, and Rauch is using a very expansive, and perhaps misleading one.  Rauch also urges us to change current regulations to empower party leaders, and is persuasive–to an extent.   Continue reading →

Are the Thai Anticorruption Agency’s Charges against the PM Politically Rash or Politically Shrewd?

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In my last post, I discussed the recent charges brought by Thailand’s National Anti-Corruption Committee (NACC) against the current Prime Minister, Yingluck Shinawatra, for failing to prevent corruption in the Thai government’s controversial (and recently discontinued) rice purchasing program. There are a few respects in which this case raises important questions not just for Thailand, but for anticorruption enforcement more generally. One, which I discussed last time, is the fact that the NACC has charged the Prime Minister not with engaging in corruption, but with (criminally) failing to prevent corruption. Another concerns how the NACC is managing – or failing to manage – the delicate and difficult politics of bringing charges against a sitting Prime Minister in the midst of ongoing political turmoil, in which the Prime Minister and her party remain very popular with much of the nation — and would almost certainly would have won the election that opposition protesters effectively blocked. My educated guess is that if you were to ask members of the NACC how the political situation affected their decision-making, they would say that it had no effect at all – they simply followed the evidence where it took them, without fear or favor. This is what anticorruption enforcement officials always say, at least publicly. I suspect they may actually believe it, and perhaps it’s (sometimes) true. But anticorruption enforcers operating in politically difficult environments often do, and often should, think carefully and strategically about the constraints and opportunities those environments create – Gabriel Kuris’s studies of the Indonesian KPK (here and here) provide nice evidence of that.

So, was the NACC’s decision to bring these charges against the Prime Minister at this moment a politically rash decision, or a politically shrewd one? It’s easier to make the case for “rash”, but at the risk of revealing my ignorance of Thai politics (or my ignorance more generally), I’m going to make a tentative case for “shrewd”. Continue reading →

Bright Line Rules: A Way to Reduce Politicized Enforcement?

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Yesterday Matthew discussed the wisdom of the Thai anticorruption agency’s recommendation that Thai Prime Minister Yingluck Shinawatra be charged with failing to prevent corruption.  The case would be brought under Article 157 of the Thai Criminal Code, a broadly worded law providing that a public official commits a crime if someone is injured as a result of the official’s failure to exercise his or her duties.

Statutes with such a broad sweep are a standard response to corruption in many countries, enacted out of a fear that a clever criminal can find a way around tightly drawn provisions of law.  Indeed, countries as diverse as Tanzania, South Korea, Indonesia, and Vietnam have all enacted broadly drawn laws that criminalize the “abuse of public office for private gain.”  However, such laws vest enormous discretion in the hands of law enforcement.  A critical–and often overlooked issue–is whether law enforcers should enjoy such discretion. Continue reading →

When Should Government Officials Be Criminally Liable for Failure to Prevent Corruption? Reflections on Thailand, and Beyond

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Three weeks ago, Thailand’s National Anti-Corruption Commission (NACC) recommended charging the sitting Prime Minister, Yingluck Shinawatra, with violating Section 157 of the Thai Criminal Code, one of Thailand’s key anticorruption laws. The corruption allegations concerned malfeasance in the Thai government’s controversial rice-purchasing program. There is much to be said about the NACC’s action and the underlying allegations, as well as how this will play out in the roiling cauldron of contemporary Thai politics. But perhaps the most striking thing about the charges, with the greatest potential significance outside of Thailand, is that the NACC did not allege that Prime Minister Yingluck herself committed any corrupt act, or even that she oversaw or directed or approved of any corrupt act. Rather, the NACC’s criminal complaint alleges that Prime Minister Yingluck knew about the alleged corruption in the rice-buying program and failed to stop it. This is possible because Section 157 applies to any official who “wrongfully exercises or does not exercise any of his functions to the injury of any person” (emphasis added). The NACC seems to read the prohibition on wrongful failure to exercise official functions quite broadly, so that it extends not only to an official who corruptly fails to take action (such as a health inspector or customs officer who looks the other way in exchange for a bribe), but also to an official who fails to take action to prevent corruption in the programs that official supervises.

That theory of criminal liability, applied in this context, is bold, and perhaps unprecedented. Of course, in private organizations, many legal systems may impose civil liability on corporate officers and directors who knew (or should have known) about corrupt activities by the corporation and failed to take appropriate remedial measures. But I can’t think of another instance in which an anticorruption enforcement agency has brought criminal charges against a senior government official (let alone a sitting head of government) for that official’s failure to stop corruption in a government program.

So what should we think about this? Is the expansive theory of liability under Section 157—as interpreted by the NACC—something that other countries should emulate? The short answer is that I’m not sure, but I have a few preliminary thoughts.

Continue reading →